SHA, NSSF and housing levy lack transparency — report

The funds cited were introduced to finance the President's legacy programmes, among them the housing levy, the Social Health Authority and the National Social Security Fund.

The report notes that while the government implemented tax measures passed in 2024 to mobilise resources for affordable housing, health insurance and pensions, concerns remain about how the money is managed and whether the intended services are accessible.

Among the most contentious is the housing levy, introduced in 2024 to finance affordable housing.

According to Human Rights Watch, the levy lacks a clear management and oversight framework, including lack of transparency criteria to determine who will benefit from the houses to be built.

“In June 2025, parliamentarians questioned a government decision to invest the levy funds in Treasury Bills, and the failure to account for more than Sh4.2 billion ($32.5 million) interest accrued from the investment,” the report says.

The absence of public reporting on how the funds are administered, HRW says, has fuelled queries among contributors, who are yet to see tangible benefits from the deductions on their payslips.

At the same time, the report highlights deep concerns in the health sector following the establishment of the Social Health Authority, which replaced the defunct NHIF.

The report says contributions to SHA have increased more than tenfold for many workers, but hospital workers and policy experts cited in the report say patients still struggle to access affordable care.

Audit reports referenced by HRW point to mismanagement of health resources, with some hospitals allegedly linked to influential individuals accused of defrauding the authority through irregular claims and billing practices.

“Despite higher contributions, patients continue to face barriers in accessing services,” the report notes, raising questions about whether the expanded funding has translated into better healthcare delivery.

HRW further points to the sharp increase in NSSF pension contributions, which rose 10 times under new regulations, as another area where citizens are contributing significantly more to public funds without sufficient clarity on governance safeguards.

Ruto has defended the measures as part of a broader strategy to reduce reliance on external borrowing and strengthen domestic resource mobilisation to fund social programmes.

However, the rights group argues that revenue mobilisation without robust oversight risks undermining public trust and weakening the very rights these funds are meant to support.

The housing levy has been particularly controversial, with court challenges and public protests since its introduction. Critics say that beyond legal questions, the government has not adequately explained how contributors will qualify for houses, how projects are selected and how funds are tracked.

In the health sector, SHA’s teething problems have been widely reported, with patients complaining of denied services, delayed reimbursements to hospitals and confusion over benefit packages. Health workers’ unions have repeatedly raised alarms about operational gaps even as contributions rise.

HRW links these challenges to a lack of effective checks and balances in the management of public resources.

“While taxation to realise economic and social rights is legitimate, it must be accompanied by transparency and accountability,” the report states.

The funds have separately faced legal challenges, with petitioners challenging their constitutionality.

The housing levy has particularly been litigated on, with the High Court initially declaring the 1.5 per cent housing levy under the Finance Act 2023 unconstitutional in November 2023. Challenges focused on unfair taxation, lack of public participation and encroachment on devolved county functions.

A revised Act was passed in March 2024, but further challenges persist regarding land usage and implementation.

The new NSSF deductions that take effect this month have also faced court challenges all the way to the Supreme Court.